Check my Edgerron Company is able to produce two products, G and B, with the sam

Question

Check my Edgerron Company is able to produce two products, G and B, with the same machine in its factory. The following information is available. Product G Product B Selling price per unit Variable costa per unit Coneribation margis per unit Machine hoars to produce 1 unit Rex ?zum unit sales per month 230 138 5 92 0,4 hoars 1.0 bours 650 units 250 unita 315 The company presently operates the machine for a single eight hour shift for 22 working days each month. Management is thinking about operating the machine for two shifts, which will increase its productivity by another eight hours per day for 22 days per month. This change would require $11,500 additional fixed costs per month. (Round hours per unit answers to 1 decimal place. Enter operating losses, if any, as negative values.) 1. Determine the contribution margin per machine hour that each product gene ates roduct B Contribution maigin per unit Contribution margin per machne hour Product B Maximum number of units to be sold Hours required to produce maximum unts 510 2. Hiow many units of Product G and Product B shouks the company prodace if &contres; to operate with ony one shit? How much l otal contribution margin does this mix produce each month? K Prev 6 of 6Next

Explanation / Answer

1) Contribution Margin

2)no. of units to be produced

3)If Company Adds Another Shift

4)IF MAXIMUM SALES OF PRODUCT G ARE REALISED AND ALSO RUN ON DOUBLE SHIFT

Product G Product B Contribution Margin Per unit $115 $92 Machine Hours Per unit 0.4 1 Contribution Margin per Machine Hour $287.50 $92 Product G Product B Total Minimum No. of units Sold 650 250 Hours Required 260 250 510

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